Dow Plunges 85; Nasdaq Rises 6

Published 7:00 pm, Tuesday, January 21, 2003

Wall Street extended its four-day decline Wednesday, falling on disappointing earnings from J.P. Morgan Chase and Eastman Kodak and increasing concerns about war with Iraq.

The Dow Jones industrials was 15 points away from wiping out all the gains they enjoyed in the market's New Year's rally. They gained nearly 501 points in early January on hopes of better prospects for 2003, but the pessimism that dominated Wall Street last year has resurfaced over the past two weeks.

Analysts said investors were worried about discouraging profits and were often looking past positive numbers because of weak outlooks from companies in recent days.

"Weighing heavily is not so much the earnings, but a sour look from many CEOs and companies in the way they view the following year," said Charles Pradilla, chief investment strategist at SG Cowen Securities. "They're saying the outlook isn't that good to warrant an acceleration of capital spending."

By late afternoon, the Dow was down 85.43, or 1 percent, at 8,357.47, having declined nearly 400 points in the previous four sessions.

The market's broader gauges were mixed following their own four-session losing streak. The Nasdaq composite index rose 5.78, or 0.4 percent, to 1,370.03. The Standard & Poor's 500 index fell 4.25, or 0.5 percent, to 883.37.

The Nasdaq was about 34 points away from erasing its 2003 gains, while the S&P was about three points away.

J.P. Morgan, another Dow stock, declined 69 cents to $24.73 after the financial company reported a quarterly loss wider than analysts expected.

Stocks have slid in recent days amid growing tensions with Iraq and tepid profit outlooks, leading investors to believe the economy will remain sluggish in the coming months. Analysts say the uncertainties are creating pessimism even when companies report encouraging earnings.

AMR, the parent of American Airlines, fell 95 cents to $3.95 after it posted a fourth-quarter loss that was narrower than analysts' expectations.

Bank of New York fell 31 cents to $25.81 after missing its sharply reduced earnings estimate, citing loans and leases to the troubled airline industry that it wrote off.

Gainers included Pfizer, which rose 41 cents to $30.91, after the drug company reported fourth-quarter earnings that beat Wall Street's estimates.

Declining issues outnumbered advancers about 3 to 2 on the New York Stock Exchange. Volume was moderate at 1.19 billion shares, compared with 999.55 million traded at the same point Tuesday.

The Russell 2000 index, a barometer of smaller company stocks, fell 1.02, or 0.3 percent, to 382.15.